NIRP’s Signal Indicates Fireworks Will Soon Send S&P 500 to New High

Michael Markowski  |

The NIRP Crash Indicator’s signal has been downgraded from the Red, full-crash-underway reading to the cautionary Yellow crash-less-imminent reading. The signal had been at Red since shortly after midnight on June 24, 2016. See “NIRP Crash Indicator Signal Now at ‘Red, All Out Crash Underway’ Reading” June 24, 2016. The S&P 500 has had a tendency to perform well when the NIRP signal is Yellow. On Tuesday May 10, 2016, the S&P 500 experienced its single biggest one day advance since March 1, 2016 after the NIRP signal was downgraded from the Orange crash-imminent reading to Yellow on May 9, 2016.

The sudden stability of the dollar versus the yen and the S&P 500’s four consecutive day rally from June 28 to July 1, 2016 to within one half of a percent of its June 23, 2016 close portends that the fireworks will soon go off that will send the index to an all-time high before it experiences its next correction. Based on the market’s action it appears that the Brexit had been discounted as originally predicted in my June 23, 2016, article “S&P to New All-time Highs Before NIRP Signal Reverts Back to Orange”. The resiliency of the S&P 500 to bounce back has been quite impressive.

The primary reason for the NIRP Crash Indicator’s signal going from Red to Yellow on the first day of July was due to the U.S. dollar stabilizing and trading in a narrow trading range versus the Japanese yen for the week ended July 1, 2016. The chart below depicts that after bottoming at 100.5 yen on June 24, 2016 the dollar recovered quickly to trade above 102 yen. The dollar then steadied and was able to close at above 102.5 yen for every day between June 28, 2016 and July 1, 2016.

While the Red signal was in effect the S&P 500 went from its close of 2113 on June 23, 2016 to an intraday low of 1992 on June 27, 2016 before closing at 2000, the lowest close since March 10, 2016. From the peak to trough the index declined by almost 6% over the two consecutive trading days before mounting a strong recovery on Tuesday June 28, 2016. The Friday June 24 through Monday June 27, plunge ranked as the S&P 500’s eight biggest two day percentage decline ever and largest since August 2015. See Fox Business “Two-Day Brexit Swoon Wipes Out $3T in Global Market Value”, June 27, 2016.

Note. Since the Orange signal can quickly change to a Red crash-underway reading with a potential market crash of 5% or more, the NIRP Crash Indicator is best utilized by an investor to protect a portfolio when the signal is either Orange or Red. See May 11, 2016 report “NIRP Crash Indicator Ideal for Futures Hedging and Trading”. From the NIRP Crash Indicator becoming available on March 1, 2016 and through June 24, 2016 which is when the first Red signal occurred it had fluctuated between the Yellow and Orange signals.

The NIRP crash signals are published and freely available each day at

  • Red — full crash
  • Orange — pre-crash
  • Yellow — caution
  • Green — clear

The NIRP Crash Indicator was developed from research conducted on the Crash of 2008, which revealed the metrics that could have been used to predict the Crash of 2008 and its V-shaped reversal off of the March 2009 bottom. See article “Here's How Japan's NIRP Increases the Probability of Global Market Crash”, March 4, 2016. The metrics are now powering the indicator. See March 7, 2016 article “New Indicator to Predict Future Market Crashes”.

For the NIPR Crash indicator to decrease from the crash imminent Orange or from the crash underway Red readings to the cautionary Yellow reading requires that the exchange rate between the yen and dollar be stable for an extended period of time or that the dollar advance significantly or spike up versus the yen. An increase in the indicator’s reading from Yellow to Orange or Red requires a steady advance or a significant one day advance for the yen versus the dollar. The relationship between the yen and the euro is a secondary indicator.

The primary metric that I discovered that now powers the NIRP Crash Indicator are sudden increases in volatility for the exchange rates of the yen versus the dollar and other currencies. The significant changes in the yen-dollar exchange rate accurately predicted the crash of 2008, and the recent declines of the markets to multi-year lows in August of 2015 and February 2016. In my April 11, 2016 "Yen Volatility puts Market on Precipice of Crash” article and my video interview below entitled "Yen Volatility Causes Market Crashes", I provide further details on the phenomenon of the yen being a leading indicator of market crashes.

Based on my continuing research coverage of the spreading negative rates and the devastating effect that they can have on the global banking system the probability is high that the major global stock indices including the S&P 500 will begin a significant decline by 2018 at the latest. My April 11, 2016 article entitled, "Negative Rates Could Send S&P 500 to 925 If Not Eliminated” provides the rationale as to why the S&P 500 could potentially decline by more than 50% from its May 2015 high. I highly recommend my 9 minute 34 second video interview by SCN’s Jane King entitled "Why Negative Rates could send the S&P 500 to 925" be viewed.

The mayhem in the markets on the trading days of June 24 and 27, 2016 which followed the NIRP Crash Indicator’s signal going to Red further attests to the reliability of its signals. See May 1, 2016, article “April 2016’s Signals Confirm Reliability of NIRP Crash Indicator”. The following additional reports and articles covering the NIRP Crash Indicator and the yen and dollar are recommended:

For an overview and access to links to the subjects that I cover, including the digital economy, negative rates, perfect shorts, and micro-cap stocks please go to Free access to the NIRP Crash Indicator’s signals is available at

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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